Rule 12b-1 permits registered open-end management investment companies to distribute their own securities and pay the expenses of distribution out of company assets, provided the company adopts a written distribution plan and meets certain other requirements. The rule requires, among other things, that the fund adopt a written plan describing all material aspects ofthe proposed financing of distribution ("rule 12b-1 plan"). The plan must be approved by the fund's board of directors, including the independent directors, and by a majority of the fund's outstanding voting securities.
US Code:
15 USC 80a-12b
Name of Law: Investment Company Act of 1940
The estimated annual burden hours for funds with rule 12b-1 plans decreased by 495,925 hours from 653,600 hours to 157,675 hours. This is primarily due to revised estimates the staff made based on extensive conversations with fund representatives involved in the administration of rule 12b-1 plans. In the past, the staff assumed that each fund portfolio would incur the burden of complying with the rule 12b-1Âs collection of information requirements individually, but the staff now understands that the collection of information burdens are typically incurred at the fund family level. Because there are significantly fewer fund families than fund portfolios with 12b-1 fees, the estimated time burden has decreased significantly. The change is also affected by an increase in the number of portfolios with 12b-1 plans currently operating, and an increase in the estimated time spent by fund accountants. The estimated total annual cost burden did not change.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
Rule 12b-1 Text.doc
Rule 12b-1 (17 CFR 270.12b-1) under the Investment Company Act of 1940: Distribution of Shares by Registerd Open-end Management Investment Company.